Higher education is central to the re-shaping of the North East. There are five universities in the region - Newcastle, Northumbria, Durham, Sunderland and Teesside - which have developed an unusually close relationship with the business sector, and have geared their courses to the demands of local commerce and industry.
"We aim to provide courses that link with the economy of the North East," says Mollie Temple, Pro-Vice-Chancellor of Sunderland University. "An example is that in Sunderland the call centre industry is growing tremendously fast, so we work with that industry. We expect more of our students will go there. And inward-investing manufacturers are looking for two kinds of student: a few specialist engineers, for example in micro-electronics, and a few like Nissan want broad engineering skills. Many of the inward investors want flexible students, capable of personal development."
Newcastle and Northumbria Universities, too, amend their curriculums to fit in with local commercial needs. The "Graduate Direct" project is run by the two universities, with finance from the Department for Education and Employment, liaising with local small- and medium-sized enterprises (SMEs) to promote the employment of graduates, and to feed into the universities knowledge of the skills required by local SMEs.
Historically, the North East has had what is termed a "branch economy", with many people employed by large organisations, often with headquarters a long way away, such as British Coal, British Steel and the shipyards. Now, it is recognised, there needs to be a thriving independent SME sector, alongside today's variant of the branch economy, inward investors. But too often developing SMEs in the region are unaware of the benefits of graduate recruitment.
"Many SMEs will ask: 'what is a graduate?' or 'what do they do in university for three years?'," says Maurice Tinkler, co-ordinator of Graduate Direct. "We raise the profile of graduates in their minds, and provide some work experience."
Graduate Direct is trying to stem the flow of graduates away from the North East and assist graduates to get better jobs by using their degrees, while strengthening the skill base of SMEs in the region. A large proportion of undergraduates in the area are local people, many of them are mature students, and by preference will stay in the area on completion of their studies. In the 18 months since Graduate Direct began, it has placed about 110 graduates in jobs. This may not seem many, says Mr Tinkler, but these are people who would otherwise be lost to their area, or would go into jobs where their qualification was wasted.
Equally important is to persuade graduates to consider not just the major corporations as future employers. The needs of local companies are fed into the universities' career services, helping shape the courses, while students are advised which languages and vocational qualifications are in demand.
Another scheme aims to boost the number of graduates starting-up their own businesses. Durham University runs the Graduate Learning about Entrepreneurship Accelerated through Mentoring programme (GLEAM), which puts new graduates who wish to go into self-employment in contact with existing businesses. These will talk the graduate through the initial stages of starting their own business, while giving them some office space, a phone, fax and personal computer to use, as well as, often, ideas and sub-contracting work. The early signs are that this approach is successful.
The universities' keenness to work with commerce and industry is also showing results. One of the larger call centre operators in the region is the US corporation Matrixx, 40 per cent of whose employees are graduates. The availability of good local graduates and the number of nearby respected universities were major factors in its decision to locate in Newcastle.
"Graduates often possess the strong communication skills required to work in customer management," says Andrea Yates, human resources manager at Matrixx. "The five universities in the region are a good local source of recruitment, and we have developed direct contacts with several of the universities, especially their foreign language departments."
Alison Goodman, regional director in the North East for Hays Accountancy Personnel, says that it is not only call centre work where language skills are in demand. "With inward investment, languages become more important along with a business degree if possible," she says.
Thanks to the regional development agency and, in part, to the universities, the North East is becoming economically stronger, and demand for graduates is growing.
But the message to students continues to be to choose a degree and post- degree vocational course with care, reflecting employers' actual skill demands. The result may be a healthy career without having to move to the South.